Budgets – Don’t Be Frightened

I am now well into my second year of living out on my own. I have a big girl job, bills to pay, and live halfway across the country from my home and family. One thing that I knew would be a huge adjustment when my parents tossed me out of the nest was being entirely responsible for every cent I would spend. As an anxious, frugal, and money-conscious person I decided the first thing I wanted to do was set up a budget.

I knew the general premise of a budget – don’t spend more than you make – but had never created a full-fledged one for myself. The scariest part for me was guessing how much money to allow myself to spend in each category. Obviously rent, car payments, and internet bills were predictable numbers each month but what was an acceptable amount to spend on groceries, household necessities, and eating out? How much should I be contributing to my 401K, Roth IRA, and long-term savings? How was I supposed to figure all that out??

The answer: by trial and error. By always remaining conscious of my budget as I spend money but to use the first few months to explore what I naturally tend to buy. It’s an ongoing experiment; a budget should be ever-changing to adapt to your current needs and desires. Adjusting your spending and saving goals does not mean your budget is broken but rather that it is alive and well. Forgetting about it or ignoring that it exists is when you have a problem.

Creating a budget is not a time to force yourself into the financial being that you ideally want to be. Can you really give up eating out altogether? Are you truly not going to be tempted to buy new clothes a single time in the next 6 months? Doubtful. This is a time for dreaming, optimism, and goal-setting but let’s be realistic. You’ll be more likely to be happy and actually stick to your budget if you craft it into an attainable goal.

One realization that has been incredibly helpful and anxiety-reducing for me is the notion that a budget isn’t meant to be constrictive. I try to remember that I originally created mine to allow me financial freedom and peace of mind. If I know where all my money is going then I can actively manage my savings goals and prepare for the future. I don’t have to worry that I might be eating out too frequently, or splurging on kitchen gadgets, or that maybe I’m saving a bit too much for retirement rather than for my emergency fund. With a look at my budget I can clearly see that if I stay within the limits that I have defined then I will not spend more money than I make. And if I tend to continuously overspend (or underspend) in a particular category then I can track that and make adjustments. For example, after a few months I discovered that my initial grocery budget was consistently more than I needed so I chose to increase my car payments slightly to save a bit on interest and also put away a little more into my emergency fund. It was an amazing feeling to be able to actively add to my savings and know that I wasn’t sacrificing anything in another area of my life.

That is the beautiful thing about actively being in charge of your own budget – you get to decide what works for you and it can always be adjusted! Remember, your budget is for you and does not have to be similar to your friend’s; there is more than one way to achieve financial stability and you get to choose exactly what you spend your money on. Isn’t that exciting?

Stay tuned as I continue to report on my experiences falling down and getting back up on my way to becoming a financially responsible adult…

2 thoughts on “Budgets – Don’t Be Frightened

  1. Cathy says:

    I like your approach! However, I must protest at your characterization of being “tossed out of the nest.” As I recall, while you might not have jumped out of the nest, you stepped out pretty confidently on your own!! 🙂

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